November 19, 2008… It appears this economic “downturn” is not missing very many places. One or more of the ”Big Three” auto manufacturers will not survive. How many people will be affected? These companies have had many warnings. They have made some changes in their organizations. But, as we hear their pleas in trying to get financial aid from the Federal Government we can read between the lines. GM especially seems to believe they are special and deserve some handouts. This kind of support is dangerous in many ways. First, it places more and bigger burdens on the public. It puts the people of the United States at jeopardy. It reduces the resources of the country and puts us at risk in the world. Money doesn’t grow on trees. Theses gifts have to be paid back and if they are not, the people pay in the form of taxes. Some one has to create the wealth. The capitalist system places that responsibility on the businesses it supports. GM, Ford and Chrysler have in a sense pledged themselves to be part of that wealth building community. If their businesses lose money, they are not fulfilling their responsibility. I would expect them to make and sell cars at a profit. I would expect them to be able to do this better than Toyota or any European manufacturer. GM has been chasing Toyota since 1960. And, they are falling further behind. GM has been eating their dust. GM needs to get out in front and make dust. GM’s leader sounds arrogant and looks to be ignorant of his responsibility.

I feel sorry for the people working for GM. They have been hoodwinked. GM cannot afford to pay them the level of compensation promised. GM cannot support their suppliers and dealers. When I was in business I did not want to work with suppliers or customers who failed to make a profit. Businesses that are not profitable are like drugs. They sap our economy and live like vultures. We should not support businesses who do not contribute to the welfare of our country. Check it out. Make sure you are spending your hard earned money wisely. Just buying cheap is not the whole answer. Buying foreign produced goods hurts the country. I include cars, oil & prescription drugs in the “it’s a mistake to buy foreign” category. But, what do we do when our own companies can’t or don’t compete? Your voice is heard by where you buy. In the case of cars, we don’t have to buy. We can repair. We can find other means of transportation. Let you voice be heard. GM workers ought to be able to change jobs and work for companies in the U.S. rebuilding and refurbishing old cars. We’re Americans. We’re creative and resilient. We can find alternatives. We are survivors. The government cannot fix these problems. But, we can. This can be a time of renewal. Now is the opportunistic time. Let’s grab it and go. Solutions are out there.

THE WORLD TODAY

Everyone in the world is now being visibly touched by the hand of God. Thirty nations report being in a significant world recession. Divine providence will not be thwarted. The world and its nations cannot create any sustainable economy beyond the providence of its creator. Wealth is wealth by the definition of the creator. False wealth and false hope will not be achieved much less sustained.

Think about China trying to grow their economy at a double digit rate. Where are they going to find the people who will be able to manage the new business efficiently. At this time factories are closing because they are running out of cash. I don’t know of any businesses that can sustain a growth rate greater than about 8% because they are unable to generate enough cash to sustain the growth. In order to grow they need outside cash infusion which they will be unable to pay back. In the U.S. that has recently been called the credit crunch. However, it is more aptly termed “having too much debt”.

GM FORD & CHRYSLER

What do you think? Bail these guys out. They’ve known about their problems for more than ten years. And, now we get another warning about the problems of the nation. Much of the problem is brought on by the leadership ( or lack of ) in our nations capital. But, what’s the matter with the Detroit guys. Trying to get someone else to solve my problems is a cop out. The first big warning came in 1960 when the Japanese first showed there face. Gm said “ Let them have 10% of the California market.” Another warning came with 911. Instead of looking inward at our problem we elect, overwhelmingly I might add, to go after the terrorists. And, now we are looking to throw more government and more money at the problem. Where will the money come from. Aren’t we about out of money?

Let’s send the car guys back to the motor city and tell them to fix their own problem. Let’s see three cars from each of them that will complete with a Toyota Camry in all quality aspects including fuel mileage and can be priced profitably $5,000 below the Camry. The big three might have to clean up their respective houses. New alternate fuel cars can come later after the basics are in place.

We in the United States need to look inward and build ourselves into a true 800 pound guerrilla. Then, the terrorists won’t hate us so much. We need to earn more jobs as a result of our businesses, both large and small, being better than the foreign competition. We should be ashamed and we should be angry. I challenge all readers to pray, encourage, do whatever to work toward a more productive America.

CONSERVATION OF MASS AND ENERGY

CONSERVATION OF MASS AND ENERGY written by Frank 11/1/08

Sorry about the science. But, I just can’t get away from the idea that the God who made the universe made it consistent. There is no deviation from the principles of the creation. Every thing that goes up here must come down. There are no exceptions.

The current “situation” with the Global economy follows the same rules. Wealth is not created out of nothing. If there is no foundation there is no wealth. Since the birth of derivative in about 1985, people around the world have been deceived. The world stock markets have been trading stocks at values not representative or the true values. I tend to think the value of financial investments should be measured by the return on the investment. Ten percent return is a good number. That is a P/E ration of 10 for a stock. A five percent return is a P/E ration of 20. I like a return in the 7-8 % range. That is equivalent to a P/E range of 12.5 – 14.2. So with this simple formula, I would buy stocks that are lower than 12.5 P/E ration and sell them when they go above 14.2. Right now there are some available below 12.5 P/E and with a dividend payment of 65%. That would seem to be a good buy except that we have not yet seen the effects of rising unemployment. I am still waiting. The market will go down further.

The same principles apply for carbon dioxide concentration in the atmosphere. God created the universe containing the earth using the same principles. It’s the only way that there can be enough stability to support life for the period intended. So, the atmospheric conditions that support life as created have to hold constant for a period long enough to accomplish the purposes of the creation. Let’s over simplify the situation. Animals and reptiles need oxygen to live. Plants, grasses and trees need carbon dioxide to live. They help each other. Animals use oxygen and give off carbon dioxide as a waste product. Plants use carbon dioxide and give off oxygen as a waste product. To make a long story short, animals and plants use each other to survive. If there is not enough oxygen then the number of animals must go down. If there is not enough carbon dioxide, then the number of plants must go down. The quantities of atomic carbon and oxygen stay pretty much the same all the time. This is consistent with the principle of mass and energy being conserved. However, the form of the carbon and oxygen can and does change to maintain the required equilibrium. If another factor is introduced into the situation then an equal and opposite change in the equilibrium process will occur. If some forests are destroyed, then the remaining plants and animals have to react accordingly. In any case, changes will occur to maintain the required ratios of carbon dioxide and oxygen.

These cycles have held up and proved to be reliable for centuries and millenniums. I think it is reasonable to expect them to continue. I believe it is folly to think that man can outmaneuver God.